European Council President Herman Van Rompuy said the EU leaders had reaffirmed the need for sound government finances, but there was a hint of greater flexibility in his language, the BBC's Andrew Walker in Brussels reports.

Such policies do allow for deviation from borrowing targets if they are due to the weakness of the economy, our correspondent says.

At the same time, Mr Rompuy admitted that the EU leaders were "fully conscious" of "the mounting frustrations and even despair of the people".

Pursuing tax evaders

Some economists argue that in current circumstances austerity can actually make government borrowing rise, partly because of the impact that declining production has on tax revenue and welfare spending, our correspondent says.

The summit conclusions on Thursday included a call for more effective tax collection, saying "it is important to ensure that everybody pays their share of taxes".

There is a drive in the EU to pursue tax evaders, including some big corporations who exploit the complexity of commercial law to reduce their tax bill.

The UK is especially keen to make the EU single market function as was intended. Some big single-market initiatives are not yet in place, including new rules on recognition of professional qualifications, e-signatures for cross-border business and the posting of workers abroad.

Proposals to deepen eurozone integration will dominate an EU summit in June. The first "building block" of that will be a banking union, which will give the European Central Bank (ECB) far-reaching supervisory powers.